Crown Minerals Amendment Bill

on behalf of the Minister of Energy and Resources: I present a legislative statement on the Crown Minerals Amendment Bill.

💬 DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

I move, That the Crown Minerals Amendment Bill be now read a second time.

The Government commenced a two-part review of the Crown Minerals Act 1991 in 2018. Tranche one of that review was completed later that year, and it gave effect to the Government’s policy to end future offshore petroleum exploration and confine any future onshore developments to the Taranaki region only. In progressing tranche two, the Government decided to focus first on the biggest issues and risks: the Crown Minerals (Decommissioning and Other Matters) Amendment Act was passed in 2021. This strengthened the Crown Minerals Act (CMA) to help mitigate the risk to the Crown and other third parties from having to undertake and fund decommissioning in the future. No one wants to see a repeat of the events surrounding the Tūī oilfield, where the operator liquidated and the Government had to step in and pick up the bill at the cost of the taxpayer.

This bill aligns the Crown Minerals Act with wider Government policy while maintaining its current role, which is for the economic development of Crown-owned minerals within New Zealand for the benefit of all New Zealanders. This bill concludes tranche two of the review by proposing amendments to remove the promotional intent in the purpose of the Crown Minerals Act, and to improve permit and licence holder engagement with iwi and hāpu. The bill also seeks to clarify decommissioning-related provisions.

Before speaking about the bill’s proposed changes to the purpose statement, it’s important to understand some of the context about the Crown Minerals Act and how it fits in with wider Government objectives. The Crown Minerals Act was amended in 2013 to attract investment in our petroleum and minerals sector. A purpose statement was added, which is “to promote prospecting for, exploration for, and mining of Crown owned minerals for the benefit of New Zealand.”

Since 2013, the strategic and wider regulatory environment in which the Crown Minerals operates has evolved. Climate change is an increasing focus, as is the use of an intergenerational lens in decision making. New Zealand has domestic targets to reduce our greenhouse gas emissions, with carbon emissions to reach net zero by 2050. We’ve set an aspirational target of 100 percent renewable electricity generation by 2030. Our 2022-25 emissions reduction plan sets out strategies and actions needed to contribute to the global effort to limit global warming. The Government is also progressing the development of the New Zealand Energy Strategy, which will set the direction for New Zealand’s path to a low-carbon economy and signal pathways away from fossil fuels. While fossil fuels continue to play an important role in keeping the lights on today, we know the future will be bright and look different.

Whilst it is important that the Crown Minerals Act sustains investor confidence to continue the development of Crown-owned minerals where appropriate, its current focus on promotion allows limited flexibility in the choices available to the Crown, particularly in the context of a transition away from fossil fuels. So this bill makes changes to the promotional intent. The main proposal is to change the word “promote” in the purpose statement to “manage”. That will neither require nor prevent the development of Crown-owned minerals.

The key intended effect of the removal of this promotional intent is to increase flexibility in relation to when and how often future public tenders for petroleum exploration permits take place. An updated Crown Minerals Act that no longer promotes the extraction of fossil fuels will sit better alongside Government policy that is moving New Zealand towards a greener, low-emissions future, but the Crown Minerals Act will continue to play an important role. These amendments will not change the fundamental role of the Crown Minerals Act, which is to allocate development rights to Crown-owned minerals in a way that increases economic benefits to New Zealand. The Crown Minerals Act will continue to operate within a wider Crown minerals regulatory system that includes environment, health and safety, and climate change laws.

The bill also proposes changes to improve permit and licence holder and permit applicant engagement with iwi and hapū. Feedback from iwi and hapū has been that engagement with permit and licence holders under the CMA is variable. Engagement with iwi and hapū is not always prioritised by permit and licence holders, the quality of engagement is inconsistent, and there can be a lack of transparency.

The bill proposes a number of changes to create more certainty around engagement expectations. It proposes amendments that will provide iwi and hapū with opportunities to review and discuss annual iwi engagement reports that are currently required from tier 1 permit holders. It will enable regulations to specify minimum content requirements for those reports. It also proposes to clarify the feedback from hapū and iwi on past permit or licence holder engagement as a consideration when the Minister makes a permit allocation decision.

The bill also makes decommissioning-related clarifications to support interpretation of the Crown Minerals (Decommissioning and Other Matters) Amendment Act 2021. It is important that the provisions introduced through the 2021 Act are clear to enhance certainty to both industry and the New Zealand public. For these reasons, the bill proposes to clarify that assessments can be carried out to consider a person’s financial and technical ability to decommission, and that decommissioning obligations apply to all persons regardless of status and apply to all persons, such as applicants, licence holders, or transferees.

The bill was referred the Economic Development, Science and Innovation Committee on 22 November 2022 and 334 written submissions and 17 oral submissions were made, and I want to thank that excellent select committee for their work and consideration of this bill. I want to thank those who took the time to submit with all of their feedback.

Four amendments to the law have been recommended by the select committee to address matters raised by submitters. First, the select committee has recommended that a proposed change to the purpose statement actually be removed. That change would amend the focus of the purpose statement from “economic efficiency” to “administrative efficiency”. Since administrative efficiency is already expected, the select committee thought the proposed change does not add value and should instead be removed.

Second, the select committee has recommended an amendment to the provision relating to how the Minister considers feedback from iwi and hapū. The introduction version of the bill stated that “the Minister may consider feedback from iwi and hapū when assessing permit applications.” The select committee recommended that “the Minister must have regard to feedback from iwi and hapū about the applicant’s engagement where that is provided in engagement reports or in annual meetings, and the Minister may have regard to other feedback.” This change makes it clearer about how the Minister considers feedback from iwi and hapū when assessing permit applications.

The third recommendation from the select committee is to delay commencement of one provision. The commencement date for all provisions in the introduction version of the bill was set to be the day after the bill receives Royal assent. The select committee recommended that the provision outlining how the Minister has regard to feedback from iwi and hapū comes into effect on 1 April 2024. This date aligns with the start of the next reporting year for engagement.

The select committee considered that all stakeholders would benefit from some time to understand the proposed change and that it would also allow permit and licence holders some time to make changes to their engagement and reporting before they submit their next reports.

The fourth and final recommendation from the select committee was that a regulation-making power should be added that allows for time frames to be prescribed when engagement reports are passed for permittable licence holders to iwi and hapū and back. That will give clarity to all those involved to streamline the feedback process.

The select committee process has led to a better bill; I thank the select committee for that, and I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Mr Speaker. It is a pleasure to speak on the Crown Minerals Amendment Bill, and I too would like to thank my fellow members on the Economic Development, Science and Innovation Committee, and the chair, Naisi Chen, who is in the Chamber today. The National Party does not support this bill and nor did it support all of the amendments. However, we did not seek to block those amendments; we could’ve, and sent the bill back to the House unchanged and not recommended to pass. However, we didn’t want to be obstructive, and so in the spirit of cooperation we committed to be cooperative on this matter.

However, I do have some serious reservations about this bill, and it’s interesting that the Minister, the Hon Duncan Webb, made a few references in his speech to climate change, intergenerational issues, transition away from fossil fuels, etc., and moving to a greener economy. That is the refrain from across the world by environmentalists, but they forget one thing—they forget one thing—the only way to transition is actually through minerals. We require more minerals, not less, in a greener, if you like, economy, in an electrified economy. For example, in the humble cellphone we have gold, copper, silver, tantalum, tungsten, aluminium, lithium, cobalt, silicon, tin, potassium, indium, aluminium, gallium, neodymium—these are quite hard, some of these—samarium, nickel, and praseodymium.

💬 Hon Member: Such chemistry.

Such chemistry, yeah. That’s just one of our consumables. If you go to an electric vehicle (EV), it’s a similar story, a lot of those minerals, and it’s actually a significant amount—six times more minerals needed in an EV than a conventional vehicle. Things like wind turbines: an average wind turbine takes 220 tonnes of coal to make that wind turbine. All of these things come from minerals. All of these things have to be mined. The extractive industries are essential to any transition that we have. Renewable energy, particularly the intermittent renewable energy of solar and wind—they are really diffuse sources of energy. That means that we have to have a lot of plants all around the country, small wind turbines or solar panels, to extract anywhere near the energy levels that we need—all dependent on minerals. We all want to transition, but we have to be realistic. The National Party is realistic, and that’s why we stand here against this bill.

One of the major changes in this is clause 4, which alters the purpose of the principal Act, which the Minister alluded to. It’s no longer including the requirement for the Crown and the Minister to “promote prospecting” and instead going to “manage prospecting”, etc.—and exploration and mining. The Minister mentioned the oil and gas ban, which I have said many times in this House had a chilling effect on the sovereign risk profile of New Zealand. It is a significant issue for us now in a world where, accessing capital for anything—renewable projects or anything, actually—we are now seen as a much higher risk. It’s not that they think that we’ll default, but they have to price that risk—far better to actually go to some other country with a lower risk profile and put their money there. They have voted with their cash, essentially. So that has left us in a much more difficult position than we would otherwise be.

The issue about consulting with iwi—I don’t have an issue with that at all. All of the mines I’ve been around—unlike the Minister, actually, I have been down two gold mines and I’ve been to several other mines and some mines that are in the process of being reinstated after the mining has finished. The work that goes on in those projects, I’m not sure if you’re aware, on the West Coast or anywhere else, when a mine has come to the end of its life, the people that come in to restore it—and bear in mind they have to have significant bonds to ensure that they live up to their obligation—those people are passionate environmentalists. They are employed by mining companies, but their job is not to penny pinch; their job is to meet the criteria that they are required to under the law. So trying to go and really steer a horse by its tail, by trying to slow down the permitting process—Mr Speaker, I don’t know if you’ve had much to do with horses, but I have. I can tell you, steering a horse by the tail is a good way to get kicked and it’s not really effective in getting a good direction. So I think that is where we’re going wrong here.

So those mining companies do a great job in getting their land back to where it was prior to mining, as best can be. We have to accept that our existence on this Earth does change things—where we trade, we leave a footprint. The best thing we can do is to ensure that that footprint disturbs as little as possible. And I can assure you, they are doing that.

In regard to iwi engagement—all of those mining companies, it’s in their best interests to engage with iwi. They do that anyway—relationships, absolutely. However, there will be times when iwi have little to do with that particular. And that’s where my rub with this comes. Actually, the Treaty of Waitangi, under article 2—and I’m just going to quote the Waitangi Tribunal, who say, “guaranteed Māori the undisturbed position of their properties, including their lands, forests, and fisheries, for as long as they wish to retain them.” That’s great—fantastic. But so do other people. And I think I’ve had this conversation before—ahikāroa, I think, is the term—I have a relationship with the land, as I’m sure you do. Why are our rights not the same as anyone else? I really object to this provision. It should be those that are affected parties and interested parties. It should not be based on ethnicity. It should not be based on a particular iwi or anything else. If they are an interested party, they will be identified as that anyway. It’s nonsensical to put this in the law, it doesn’t make sense, and it’s just a crazy situation.

Permits and permitting is what New Zealand Petroleum and Minerals are supposed to do within the Ministry of Business, Innovation and Employment. They have been slowing down, I suspect, in the view of trying to do their bit for climate change. The processing of permits and the mining sector—it’s been an appalling performance that we have seen to date. Whether it’s deliberate, I don’t know. I have to assume that it might be, given that one permit application I’m aware of has been almost five years—five years—in the processing of that permit, and I’m not aware if it’s been either granted or declined at this stage. I can tell you, as of December 2022, there were 16 permits that were sitting within New Zealand Petroleum and Minerals—just sitting there, languishing. Miners tell me they are finding these issues all the time.

I spent time at Stockton mine—I’m sure you know where that is. We’re talking, here, about emissions, and we hear a lot about that from the other side of the House. Coal from Stockton lowers global emissions. Coal from Stockton is used by steel mills to lower their coal input into making steel. It’s not the emissions here that are important; if you really care about climate change, you’d care about global emissions, not the emissions in your patch. Yes, we can have an influence and we should. But when we have coal of a quality that comes from Stockton—the metallurgical coal used to make steel and other products like carbon for carbon fibre—that should be able to be extracted and sent to those countries to help lower their emissions to make high-quality steel. That might end up in a wind turbine that we put up here in New Zealand.

I think we have lost sight of the ball, here. Look, everyone cares about climate change and dealing with that, but let’s get our facts right. Let’s approach this in a way that’s sensible and actually is going to have the most effect, not do something that is simply signalling our virtue and beating our chests rather than focusing on the issue at hand. I cannot commend this bill.

The time has come to suspend this debate—this is all wrong, let’s get my wording correct for this time of the night. The debate is interrupted and set down for resumption the next sitting day. The House stands adjourned until 2 p.m. on Tuesday, 20 June. Thank you for your work this week.

Debate interrupted.

The House adjourned at 4.55 p.m.